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It’s a little over a week into the U.S. war against Iran, and we have a much clearer picture of the pain it is causing global automakers and will cause if it drags on.

In the short term, it could disrupt shipments of vehicles for Chinese, Indian, South Korean and Japanese automakers, who export cars worth billions of dollars to the Middle East through the Strait of Hormuz where shipping has ground to a halt over fears of attacks by Tehran.

But a prolonged war with high oil prices will hit inflation and raise interest rates – making car payments more expensive – and encourage consumers to seek more fuel-efficient vehicles, which could have a profound impact on automakers’ sales and production plans. 

Which brings us to today’s Auto File…

Volkswagen had a rough ride last year, contending with the dual headache of U.S. tariffs and declining sales in China – where it fell to third place after BYD and Geely.

As Reuters colleague Rachel More reports, it’s clear the world’s No. 2 automaker faces another tough year as it reported a slump in profit for 2025 and predicted only a modest recovery for margins in 2026.

You can read all about it here.

The German automaker has embarked on a major product offensive for China, but now faces yet another headache in the Middle East thanks to the U.S.-Israeli war with Iran.

That conflict could threaten luxury car demand at a time when Audi and Porsche are already grappling with ⁠weak sales and tighter margins.

Volkswagen CEO Oliver Blume lamented the fact the automaker’s decades-old business model “no longer works in this form.”

“We are simply seeing how volatile and fragile our world is, with new issues arising every month,” he said.        

Renault needs to sell more of these everywhere - REUTERS/Gonzalo Fuentes.

Renault is the smallest of the major legacy automakers, and industry experts and analysts say the French automaker has been more nimble and agile than its larger rivals in adapting to the arrival of lower-cost Chinese EVs.

Now, as Reuters colleague Gilles Guillaume reports, the company wants to grow its global sales 23% by 2030 with an overseas push to reduce its reliance on European sales.

You can read all about it here.

Under its new five-year plan, Renault plans 36 new models in the next five years, including four in ⁠the Indian market.

For Europe, the automaker aims to develop its own vehicles while leaning on partners like Geely to design models for markets like South America.

Renault’s challenge remains that it wants growth without any presence in China or the United States – the world’s top two car markets – while facing growing low-cost competition everywhere else.

China's Windrose is bringing electric trucks to Europe - REUTERS/Nick Carey. 

The rapid expansion of Chinese automakers with their more affordable EVs into Europe caught local manufacturers by surprise.

You could be forgiven for thinking you’re suffering from déjà vu because a number of Chinese truck makers are gearing up to launch electric heavy duty truck sales in Europe this year – when local manufacturers had thought it would take them years to develop competitive truck models.

You can read all about it here.

Chinese truck makers’ electric truck technology is more advanced than that of their European peers and by leaning on China’s domination of the battery industry they aim to charge up to 30% less.

European electric truck sales have been held back by high price tags and poor charging infrastructure.

But Europe’s truck industry fears that as infrastructure improves the Chinese will be well placed to take market share.

For those who thought that last year’s Nexperia chip crisis was fading into the past, think again.

As Reuters colleague Eduardo Baptista reports, China's commerce ministry has warned of ‌another possible global semiconductor supply chain crisis because of "new conflicts" between Nexperia and its Chinese subsidiary.

You can read all about it here.

Production across the auto industry was disrupted in October when Beijing imposed export controls on Chinese-made Nexperia chips after The Hague seized the company from its Chinese parent Wingtech.

Nexperia's chips are widely used in cars' electronic systems.

Beijing's latest warning came after Nexperia's Chinese packaging arm accused the Dutch firm of disabling office accounts for all employees in China.

China’s BYD unveiled its first major battery upgrade in six years as the EV maker seeks to regain momentum at home, saying its new Blade Battery can charge rapidly from 20% to 97% in under 12 minutes even at minus 20 degrees Celsius (minus 4 degrees Fahrenheit). 

Amazon's robotaxi unit Zoox is expanding testing to ‌Dallas and Phoenix and launching a command hub for fleet operations in Arizona, as it looks to widen its footprint in the U.S.'s increasingly competitive autonomous taxi market.

Toyota supplier Denso  has made a bid ‌for chipmaker Rohm in a potential $8.3 billion deal that will expand the auto parts giant's hold on power management chips used in EVs and data centers.

Volkswagen’s new Scout Motors brand has taken more than 160,000 reservations for its first model, with most customers opting for an extended-range hybrid version instead of full electric, a top executive said.

Japan's Mazda, which exited Russia in 2022, is seeing a revival as one of the country's best-selling car brands thanks to new Russian scrappage ‌charges that have shifted import patterns via third countries.

Drone startup Beta Technologies is speeding ‌up development of its Alia MV250 military cargo drone by six months, with the first flight now expected this year, CEO Kyle Clark told Reuters.

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